Jonathan Gooding and Julian Reeve from
Deloitte LLP attended the meeting to introduce the Preliminary
Planning Report to the Panel as Deloitte had been appointed as the
external auditor for the Royal Borough of Windsor &
Maidenhead. It was noted that a more
detailed report would be presented in support of the audited
accounts.

The Panel were informed that the scope of the
audit would be undertaken under the requirements of the Code of
Audit Practice and supporting guidance published by the National
Audit Office. They would be required to
give an opinion on the statement of accounts, including its pension
fund, and a conclusion on the arrangements for value for money. The
scope of our work would not be largely changed from the scope of
work set by the previous auditor and would include covering the
Statement of accounts, Annual Governance Statement, Whole
Government Accounts and Value for Money conclusion.

One area that will be different from previous
audits would be the approach to capital expenditure as the
authority were undertaking a number of large capital projects and
determining capitalised expenditure was a judgement call that had
the potential for misreporting fraud.
They would be reviewing the authority’s capital plans as part
and discuss with officers potential risks or issues identified.

The auditors would also be looking at pension
liabilities and accounts as the regulations meant they had to have
the assumption that revenue recognition was a significant risk.

Appendix 2 of the report highlighted the
auditors independence and fees.

Cllr Brimacombe reported that the Panel had
been concerned when the new audit arrangements were introduced and
thus he was pleased that Deloitte had been appointed as it meant
the authority continued to be audited by a significant branded
auditor.

Cllr E Wilson mentioned that there was a lot
of large projects planned that could have capitalisation of costs
and asked how this would be reported.
The Panel were informed that the starting point was reviewing and
understanding capitalisation of costs and that any concerns would
be reported to this Panel. Balance
sheets would be examined and risks explored. As much as possible would be presented at the next
meeting, however most would be presented at the end of the
audit.

Cllr Brimacombe asked if the auditors looked
at underlying assumptions of financial income streams and was
informed that it varied dependent on the income
streams. The starting point would be
looking at the risk assessments fr the
income before producing their procedures.

Cllr E Wilson asked how the RBWM Property
company would be audited and was informed that they had their own
auditors but they would also be audited as part of the audited
accounts. It was also confirmed that the same applied for AFC and
Optalis where the would also take a risk based approach looking at
VFM.

Cllr D Wilson asked if an update could be
provided on the pension fund and was informed that this was planned
and would be reported back to Panel.

The Panel considered the report that
summarised the Shared Audit and Investigation Service activity,
including progress in achieving the 2018/19 Internal Audit and

Investigation Plan, during the first nine
months of 2018/19 to 31 December

2018. The report complemented the 2018/19
Annual Audit and Investigation Report due to be presented in June
2019.

The Panel were asked to note the report and
approve the 2018/19 Audit Charter. The
report provided an update on work undertaken since the last
review. Changes to the Internal Audit
Charter were made to bring it in line with the CIPFA / IIA Public
Sector Internal Audit Standards, that were revised in 2017, and
were tracked in the document.

Table 1, on agenda pack page 41, showed work
undertaken. This included proactive
work to identify property occupation and rate reviews for business
rate relief and exemptions. The report
showed identified losses in this area as £215,862 but since
publication this had risen to £260,000.

Cllr Brimacombe highlighted that flood
prevention had been delayed for 9 months and asked why. The Panel were informed that the contractor had
been short of resources and thus there had been a
delay. The issue had been identified
but not addressed quickly enough.

Cllr E Wilson asked if line manager had
started to challenge audits and it was confirmed that challenges
are made and that there was the option to make corrections prior to
the final audit.

Cllr Smith mentioned that the department had
been effected by sickness and was informed that the audit plan had
been re-aligned to meet resources and any deferred audits would
still be undertaken.

Cllr Smith asked if the summary of audit
opinions awarded in table 1, with two achieving the highest audit
category, was an improvement or a low achieving year. The Panel were informed that it was anticipated
that more would be added to the highest category following
management action.

Cllr Saunders asked what reassurances the
Panel could have that governance arrangements presented to them
were happening and effective. The
Panel were informed that the Panel can add to the internal audit
plan and also the external audit would look at VFM.

Resolved
unanimously: that the Panel notes the report and:

i) Notes
the Shared Audit and Investigation Service activity for the nine
months ending 31 December 2018.

The Panel considered the 2019/20 Draft
Internal Audit and Investigation Plan.

The Panel were informed that a number of audit
reviews within the 2019/20 Draft Internal Audit and Investigation
Plan were considered as mandatory (key financial

systems, particularly high risk items etc.),
others entered or left the Draft

Internal Audit and Investigation Plan based on
their risk rating and the views of

officers and Members. Agenda pack pages 65 to 69 showed the
plan.

Cllr E Wilson asked how we got assurances, as
a commissioning authority, to areas such as Optalis and joint
venture partners. The Panel were
informed that audit would look at the contractual arrangements and
the duties agreed.

Cllr Saunders said that if they wished the
Panel should be able to review the audit reports for Optalis as we
were joint owners of the company. With
regards to AFC the Panel could ask to see their audit
reports. I

Cllr Brimacombe asked that with regards to
project compliance, including; pre, current and post project, what
was being done for ‘current’ project
compliance. The Panel were informed
that internal audit would look at governance arrangements and
evidence of good project management.

Cllr Saunders reported that he was pleased to
see project compliance on the plan. The
Panel had previously looked at project management within the
borough and noted that there was evidence of consistent methodology
being applied to larger projects, however there were a number of
smaller projects that had inconsistent approaches that would not be
picked up by the risk register and therefore my not be
audited.

Cllr E Wilson mentioned that the Panel would
like more assurance throughout the year on financial management
including budget setting and monitoring.

Cllr Saunders said that during the year there
had been a number of pressures, such as children in care increased
costs, that had not been identified and reported early enough.
During this year’s budget setting better projection of these
pressures had been included along with more commentary in the
budget report. Internal Audit had a
role to support Cabinet and the senior management team in reporting
these pressures as they happened rather than when it is too late to
take effective action.

Cllr Brimacombe reported that there could be a
change in methodology behind the budget. The base budget made a number of assumptions with
low sensitivity areas and high sensitivity areas. We should not get overly concerned when there are
variances in areas of high sensitivity as that would be
expected.

Resolved
unanimously: that the Audit and Performance Review Panel notes the
report and approves the 2019/20 Draft Internal Audit and
Investigation Plan.

54.

Local Government Act 1972 - Exclusion of Press and Public

To
consider passing the following resolution:-

“That under Section 100(A)(4) of the Local Government Act
1972, the public

be
excluded from the remainder of the meeting whilst discussion takes
place

on
items 7-8 on the grounds that they involve the likely disclosure of
exempt

information as defined in
Paragraphs 1-7 of part I of Schedule 12A of the Act"

Minutes:

Government
Act 1972, the public be excluded from the remainder of the meeting
whilst discussion takes place on the grounds that they involve the
likely disclosure of exempt information as defined in Paragraphs
1-7 of part I of Schedule 12A of the Act.

Minutes

Resolved
unanimously: That the Part II minutes of the meeting held on 20
September 2018 be approved.